Government decides not to devolve APD to Wales

Date added: June 16, 2016

The UK government has confirmed that there would be no devolution of APD to Wales. APD has been fully devolved to Scotland, and SNP has the intention of halving it and eventually scrapping it. Some in the Welsh Assembly wanted devolution of APD to Wales, so it could be cut – in the vain hope that would boost the profitability of struggling Cardiff airport. Airports in England, and Bristol in particular, were deeply opposed to APD in Wales being cut, in case that encouraged people to use Cardiff airport rather than Bristol. The local Bristol MP said that would cause unfair competition between airports. The impact of abolishing APD would only be at most £13 per return flight for anywhere in Europe, (£26 for a return flight within the UK) – with no difference for a child under 16, so hardly worth the trip all way over to Cardiff. In a Commons debate on the Wales Bill, parliamentary under secretary of state for Wales, Conservative MP Guto Bebb, said: “Air Passenger Duty has been raised during the debate, and the fact that we are not proposing to devolve it has been criticised, although I think that that is right and proper.” The loss of income from the removal of APD would in all likelihood be larger than any benefit from more inbound tourism etc, causing a net loss to the Welsh economy.
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Government decides not to devolve APD to Wales

A government decision not to devolve Air Passenger Duty to Wales will ensure fair competition between Bristol and Cardiff airports, an MP claims.

Bristol South Labour MP Karin Smyth has been campaigning against devolution of the air tax to the Welsh government as it would have made flying from Cardiff “significantly cheaper” with a reduction or abolition of APD in Wales.

The government yesterday confirmed that there would be no devolution of APD to Wales.

Cardiff airport is owned by the Welsh government and devolving APD powers would have allowed the tax to be cut, potentially drawing thousands of passengers away from Bristol.

In a Commons debate on the Wales Bill, parliamentary undersecretary of state for Wales, Conservative MP Guto Bebb, (Conservative MP for Aberconwy) said: “Air Passenger Duty has been raised during the debate, and the fact that we are not proposing to devolve it has been criticised, although I think that that is right and proper.”

An argument had been put forward that there was a need to devolve provisions for long haul passengers, but there has been no consensus on that issue, he added.

“I also ask what benefits such a measure would bring to north Wales in terms of the impact on the Welsh devolution financial settlement. At this time I think it is the right decision not to devolve air passenger duty, and I am happy to stand by that,” said Bebb.

He was responding to a question from Smyth, who highlighted the economic impact to the local area of Bristol airport, which employs 11,000 people and handles seven million passengers a year.

“APD devolution would have broken up the level playing field on which it currently operates, so the government’s decision not to devolve these powers to Wales is very welcome news for the south-west’s economy.

“Aviation has long been part of Bristol’s economic success story and our local airport’s capacity is central to further growth.”